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The objectives of this report are to look at the Human Resource Management (HRM), Human Resource Planning and Development (HRP & D), and Performance of McDonald's restaurant. Furthermore, it explains the human resource management activities, models of human resource management, effectiveness of organisational objectives, performance monitoring of McDonald's restaurant. The human resources of any organisation are the most important resource that is the direct connected between the quality of the workforce and ultimate goals. The human resource department of McDonald's is responsible for right people, right number, right jobs, right time, right cost with right knowledge, skills, experience in the right place and also responsible for training of all staff and keeping evidence on them. It also indicates us what is the usage of human resource management and how does it work in the company.
McDonald's fast food restaurant began in America in 1954. It is leading food service retailer around the world with more than 30,000 restaurants in 119 countries serving 47 million customers each day. Moreover, McDonalds is one of the world most well-known and valuable brands and increasing share in the globally. Now it is recognised worldwide establishment and first restaurant in the UK. Today more than 2.6 million people of the UK trust about McDonalds and go to eat due to provide good food with a high standard, quick service and value of money.
Human Resource Management (HRM)
Human resource management is the people management function where organizational function is fulfilled and focuses on the issues related to people for example compensation, performance management, organization development, safety, benefits, employee motivation, communication, administration ,training and, etc.
As defined by Storey in 1995, ''HRM is a distinctive approach to employment management which seeks to achieve competitive advantage through the strategic development of a highly committed and capable workforce, using an integrated array of cultural, structural and personnel techniques.''
Human Resource Management (HRM) Activities
Human Resource Management (HRM) deals with the 'Human' feature of an organisation. There are many activities of an organisation to achieve their ultimate goals. To cite an example Recruitment and selection, training and development, human resource planning, provision of contracts, provision of fair treatment, provision of equal opportunities, assessing performance of employees, employee counseling, employee welfare, payment and reward of employees, health and safety, dismissals and redundancy, and etc. I am explaining three of them as below
Recruitment and Selection
In an organization, a change happens in the level of employees where HR department maintain the requirement of personnel to meet the demand. For effective recruiting, recruitment process can be costly and takes a great deal of time to set up. It includes on what jobs needs, advertising, application, identifying who best meet the criteria, interviewing candidates, finally selecting the best candidate for the post, and etc. McDonald's advertise their job vacancies on their specialized websites and use their own personnel department to recruit staff.
Objectives of the Recruitment and Selection
The objectives of the recruitment and selection process of human resource management are as below:
- To identify the most appropriate candidate to fill each post.
- Keep the cost of selection down
- Making sure that necessary skills and qualities have been specified and developing a process for identifying them in candidates
- Make sure that the candidate selected will want the job, and will stay with McDonald's
- To make the most of the effectiveness of the McDonald's recruitment and selection practices.
Achievement of the Recruitment and Selection
In the McDonald's, recruiting process is run throughout the year. Like other organisations, McDonald's recruit internally and externally, and they for the most part recruit their managers and Assistant managers internally rather than externally, because it is easier and less training is needed due to the candidate is well known about the job. Just about 50% of McDonald's salaried managers are promoted from within McDonald's.
In addition, for preparing the job description, McDonald's describe the job title, department, location, the responsibilities, the job purpose and duties.
McDonald's uses the application form with questions which are typical questions, to know what qualification the applicant has, such as knowledge, skills, experience, and etc. Application form fill-up and make the answer of question is the first step for applicant at crew member level.
For the recruitment process, Interview is the most crucial part for McDonald's potential employee. From the short listed candidate, McDonald's call for interview with area manager or store manager at their flexible nearest branch. From the face to face interview, interviewers can know about applicants, such as behaves, confidence, knowledge, and basically how the applicants come across as a person. At crew member level, interview is the second step for applicant.
At this step, short listed candidates involve selecting a small number of applicants for the next stage. This selecting process will be carried on until the right numbers of candidates are found with the wanted quality. As a result, the recruiting team can be able to distinguish easily the strong applicants from the weak hundreds of applicants. McDonald's inform to the successful candidate over mobile phone or by email within one week. One day, McDonald's arrange an induction for a new employee that may turn him or her into a long term, loyal member of staff. In the McDonald's, the induction process begins even before the candidate is offered the job.
Training and Development
From the initial training that is called skill training, Employee can know the basic job knowledge of each position and can develop. Moreover, ongoing training program provides a more advanced level of job knowledge and make an economical employee. An ongoing programme of training evaluation enables employees to keep training up to date and according to the demand of the business. McDonalds training and development programme is an important part to the 100% customer satisfaction that the company aims to achieve ultimate goal.
Objectives of the Training and Development
McDonald's arranges training and development programme for many reasons. For example, training and development programme may be introduced to:
- Increase job satisfaction and motivate employees, as a result, reducing absenteeism and labour turnover.
- Reduce wastage and accident rates by gaining a excellent performance across the workforce.
- Develop the skills of existing employees to cope with labour shortages
- Establish the most effective and efficient working methods in order to maximize productivity and remain competitive
- Use of new equipment and the application of new technology.
Achievement of the Training and Development
We believe that training is the foundation of any success and McDonald's think so. Immediately, training begins with a one-hour orientation in McDonald's. Each branch of McDonald's has its own video player and training room. Step--by --step manuals and video tapes are played every detail of the operation. So, McDonald's is dedicated to the training and development of all their employees, providing career opportunities. So, it is an ongoing process of all McDonald's employees - it is everyone's job, every day. According to the employee position, all employees are to receive induction training followed by a structured development program. After completing the initial training, they are to pass one Observation Check list (OCL) in the particular area with successfully.
In McDonald's has 21 days of employment probationary period. During this probationary period, employee's performance is to evaluate. For example, standard of work, personal attitude, teamwork, focus of customers, hygiene and etc. After completing the probationary period, they must be achieved a competency rating of satisfactory. If they fail to meet the standards of required of performance, they can be terminated at any time during their probationary period.
Human Resource Planning
To achieve the McDonald's goals, human resource planning is concerned with getting the right people, using them perfectly, and training and developing them. In order to meet McDonald's aims and objectives successfully, people using are to identify perfectly and effective way and to identify any problem that are likely to occur (such as recruiting the best candidates) and then getting with proper solution.
''Human Resource Planning (HRP) is the process of ensuring an organisation has the correct staff at the right time, with the right skills and abilities in the right place.''
Objectives of the Human Resource Planning
The aims of Human Resource Planning (HRP) are to
- create the best use of human resources
- look forward to the problems with surplus staff
- build up a well trained and flexible workers
- decrease organisation's dependence on outside recruitment agencies
Achievement of the Human Resource Planning
Like all other businesses, for daily activities carry out McDonald's need the assistance of staff. All the important number of staff in McDonald's fulfils a key role in its operation. Without sophisticated technology McDonald's would not be successful, for setting up properly human being are responsible.
If the manager of McDonald's do not select the potential employees in careful way and do not match against the ability of post that means who are unsuitable, it can create a number of problem, for example
- poor productivity levels
- no good feeling among staff
- job dissatisfaction
- high absenteeism levels
- customer complains
For demand of labour, McDonald's analysis its future plans and estimate the levels of activity within McDonald's. As a result, they can predict that the organisation has right number of potential employee with right quality.
The external labour market is very important for any organisation because of it can make up of potential employees, locally, regionally, who have the right skills and qualification necessary at any time. For McDonald's, local unemployment figures are very important who give the indication of the general labour availability required at that time.
Also, Human resource planning of McDonald's includes searching at how labour is organised within a business or an organisation.
Theoretical Models of Human Resource Management
Generally, human resource strategy is performance or behaviour based. In addition, employees are a main resource for any service organisation.
''Organisations which successfully manage change are those which have integrated their policies with their strategies and strategic change process.''
Johnson & Scholes (1992) Exploring Corporate Strategy
There are a lot of models associated within an organisation. Such as:
- The Fombrum, Tichy and Davanna model
- The Harvard model
- The Warwick model
- Guest's model and etc
Two models are explained among them as below:
The Harvard model
According to the Harvard Model, "HRM polices need to derive from critical analysis of: the demands of the various stakeholders in a business and a number of situational factors"
Hannagan Tim, 1995
Employees are variable and valuable for any organisation. Moreover, organisations are owned and operated by various employees or people (stakeholders), the task of the management is to balance the returns to every person involved. The Harvard model emphasises on the importance of integration HR policies with business objectives. The Harvard Model is emphasised as the 'soft' approach to HRM, employees like stakeholders of the company. In this model has discussed four areas such as, reward system, employee influences, human resource flow, and work systems, there are also included situational factors such as influence of trade unions, labour market, and laws. These are also relevant to the theory. The effectiveness of the HRM is related to the four 'C's' with the theory. The four 'C's' are "Commitment, "Competence, Congruence and Cost-effectiveness. According to the Harvard theory, employees are an asset rather than a cost.
In McDonald's, line managers are responsible for people and store managers are responsible for the day to day running as a mixture of both the hard and soft approach. McDonald's believes that Staffs are an asset for them which are shown by training provision and should provide long term investment for the company.
Devid Guest has developed his model based on the Harvard model and included four outcomes which has developed into four policy goals
- Strategy integration
Guests (1987) theory, is also included in McDonalds policy, Guest believes the organisation should, "aim for high level of commitment from staff, obtain high quality output, continually improve standards, flexibility from staff, no fixed job definitions, working practices and conditions and seek strategic integration through HR policies.''
In McDonald's, improving standards continuously and flexible working times offering for staff. Line managers of McDonald's accept HRM policies and combine them into strategic plans, staff changing roles are allowing within the organisation.
Acknowledged as culture, every organisation has different values, ideas and beliefs that affect the way they operate.
According to Handy, there are four types of culture; Power, Role, Task and Person. McDonald's culture combines two of these. Top management of McDonald's reflects 'power' culture that makes the overall decisions and allowing rapid response to decisions. Other one is the 'task' culture. In McDonald's, the overall aim of the organisation is task orientated and focussing on team culture, and powerful communication between all levels of staff.
McDonald's has integrated the contingency approach by considering the environment culture. Contingency approach suggests that ''different problems and situation require different solution'', for making a sound solution, need both internal and external influences 'fit' together. Also, this approach influences promotions of staff that comes from the company means McDonald's restaurant. It is very helpful for the staff and staffs are offered appraisals that means increasing job opportunities for staff.
Human Resource Planning and Development
For a company, human resource planning is the recognition of the future labour requirements needed and how these requirements are going to be met. Human resource planning is the process by which a company ensures that it has the right number and kind of staffs, at the right time in the right place for which they are economically most useful for a company. The use of human resource planning is a big deal for any organisation.
For employee develop, human resource development (HRD) is the framework. By which, employees can develop their personal and organizational skills, knowledge, and abilities. Human resource development includes many opportunities such as employee training for developing them, performance management and development, mentoring, series planning, key employee identification, organization development and etc.
Human Resource Planning Model
Best Practice Model
Best Practice HRM is the idea that a particular bundle of HR practices has the potential to contribute to improved attitudes and behaviours, lower levels of absenteeism and labour turnover, and higher level of productivity, quality and customer service, ultimately generating higher organisational performance and profitability.
Marchington & Wilkinson (2002)
Components of best practice include employment security and internal promotion, selective hiring and firing, extensive training, learning and development, employee involvement and voice, high compensation upon organisational performance, reduction of status differentials, etc.
(Marchington & Willinson, 2002; Hughes & Julia M, 2002 International Journal of Contemporary Hospitality Management Vol.14 No.5)
Effectiveness in achieving organisational objectives to Best Practice Model
In McDonald's, more than 40% of senior managers have been promoted on the inside and not hired from outside directly. In the kitchen of the McDonald's restaurant, crewmembers are started their career by working at the smallest possible level of the chain of command. So, they carry out learning, training and development programs on a regular basis and lengthily which is reflected in their HR activities. McDonald's also offers high level of employment security. By implementing valuable and variable human resource activities, employee have been successful in developing dedicated and competent labour force who bring quality and customer satisfaction. By the recent market situation of McDonald's, employers can be observed easily what the condition of them is.
On the other hand, according to the best practice model, employers can take long term view of strategy. In addition, from the view of personal experience, it is observed that the lowest level staffs (who work in the kitchen) generally do not have awareness of the strategy of the organisation.
Also, some company's strategy is different. To cite an example, the lowest level staff of ASDA , they can give suggestion for the organisation. Their opinion senior management level can be considered or received. In additional, reward of the employee is totally appraisal based not on performance based.
From the above discussion, it can be said that McDonald's is practising many components of the best practice model but do not implement full best practice model.
Best-Fit (Contingency) Model
There are three different models are defined under contingency as below
(1) Business Life Cycle, (2) Strategy/Structure, and (3) Business Strategies
(1) Business Life Cycle
It includes four stages of organisational development for example, start-up, growth, maturity, and decline. This model also includes some human resource functions such as recruitment and selection, reward and benefit, staff training and improvement, employee relationships and etc with business life cycle stages.
Effectiveness in achieving organisational objectives to Best Fit (Contingency) Model (Business Life Cycle)
If McDonald's, want to open a new branch still today anywhere in the world, continue recruitment all around the year. (HR department, Headquarters, McDonald's) As seen earlier, Training and development has been practiced regularly and comprehensively. According to the Best fit model, during the growth stage, McDonald's recruit sufficient members and run through effective management and organisational growth. To match with HR function of an organisation, McDonald's always try to control labour costs, maintaining staff peace and getting better productivity during maturity stage.
It is very difficult to say exactly that McDonald's is in which stage of Business Life Cycle but they are mature and growing at particular rate.
Miles and Snow (1984; Cited in Bratton and Gold, 1999) identified four modes of strategic orientations: Defenders, Prospectors, Analysers, and Reactors.
Defenders companies have limited product line and the management focus on getting better the efficiency of their existing operations. HR practices in defenders include extensive and long-term focus, well defined career ladders, clear grading structures, employee share ownership, well-established HR function, etc.
Prospectors are companies with fairly broad product lines that focus on product innovation and market opportunities. It is right performance standards and expectations (Bratton and Gold, 1999)
Effectiveness in achieving organisational objectives to Best Fit (Contingency) Model (Strategy/structure)
By extensive training and development, McDonald's corporate strategy and issue want to improve their efficiency and always running to take the product into new markets. So, it can be said that McDonald's is followed the combination of Defenders and Prospectors.
(3) Business Strategies (This model is based upon Porter's competitive advantage model)
Michael Porter's (1980; cited in Bratton and Gold, 1999) formulated a framework that describes three competitive strategies: low cost leadership strategy, differentiation strategy, and focus strategy. In a differentiation strategy, managers try to distinguish their services and products-such as brand image or quality. In this way, value is added to the product and reflected in the product price. (Purcell, 1999 Human Resource management Journal Vol.9 No.3)
Effectiveness in achieving organisational objectives to Best Fit (Contingency) Model (Business Strategies)
By distinguishing McDonald's brand and providing quality of food and service around the world, McDonald's has achieved their present position. They have standard recruitment methods and policies, and highly focussed training and learning, reward system for staff remuneration. In McDonald's, line management function is very close with HR function, which has come from their HR strategy and activities.
So, from the above discussion, it can be said that McDonald's is following differentiation strategy.
Basic Human Resource Planning Model
- Recruit skilled workers
- Develop technical training programs
- Transfer managers from other facilities
- Recruiting and training programs feasible
- Transfers infeasible because of lack of managers with right skills
Human Resource programs are made according to the organizational objectives and strategies require for achieving human resource goals. Moreover, human resource objectives are directly associated to the organizational objective and planning.
To open a new branch of any company, Human Resource department need to think about production staffs, line managers, business manager, technical staffs and etc. Workforces are valuable for implementing the new product line, factory, distribution system, and achieving organizational goads.
Effectiveness in achieving organizational objectives to human resource planning model
HR department of McDonald's recruit skilled workers, develop technical training programs, and transfer managers from other facilities with right skills. They develop training programs regularly and broadly which are reflected in their activities. Although, employee hire is too costly from outside, sometimes, McDonald's hires the recruit managers from outside. After gaining most of things, McDonald's develop new objectives and new strategic plan for achieving ultimate goals.
It involves forecasting outcome of various HR programs for employee flowing into, all the way through and out a variety of job classifications. They determine how existing program and added program or combination of program will be done and need to no capability of combining program. If HR department of McDonald's do not find practicable human resource program, they must change strategic plans.
They are researched internal, external, and demand forecasting information. Such as, internal forecasting information- organizational features, productivity, promotion, demotion, transfer, turnover, and external forecasting information- external labor market aspects, controllable company factors and demand forecasting information- organizational strategic plans, size of organization, organizational design, employee support, and managerial support etc.
For the successful practices of people management, performance management is a holistic process which bringing together many elements of the organizational function. It includes particular learning and development, and gives an overview of employee status.
Performance management is establishing a culture where individual and groups get responsibility for continuous development of business process and their own contributions, skill and behavior. Performance management is about interrelationships and improving the quality of relationship between manager and individual, between manager and teams, between members of teams, and etc. So, McDonald's believe that it is a joint process, not a one off-event, not just managers, apply to all employees. Therefore, McDonald's business manager can make clear what they look forward to individual and teams to do. For example, how they should be managed and what they need to do their jobs.
Human Resource performance monitoring
McDonald's follows the ongoing performance management for employees. For example, setting goals, monitoring the employee's accomplishment of those goads, contributing feedback with the employee's, evaluating the employee's performance, rewarding performance or firing the employee. Performance management includes frequent activities to establish organisational aims to achieve those goad more effectively and efficiently. McDonald's believe that the best approach to accomplish 'value for money' is to monitor the performance levels of staff and want to reduce wasteful actions.
Effective Human Resource Performance
By monitoring improvement, departmental managers or business managers can assess the efficiency of employees and determine which ones are meeting the terms of their agreement and contributing to McDonald's success. McDonald's monitoring is the quality of work being produced that is one of the features and the efficiency levels within departments. Employee's performance helps the manager to know how they have been getting better in their business with the employees. For the future, it is an employee roadmap which increases job satisfaction. McDonald's think that it can help to develop their talent pool, support potential assessment and succession planning.
Suggest ways to make improvements
Sometimes, we see that poor performance lead to dismissal. If without checking, wastefulness is allowed to continue, staff will lose interest, motivation will be concentrated and no encouragement to produce good quality products or services. If the employees know that what jobs are doing, how they are doing, employees will be happier. If they know that they are doing good jobs, that's recognized, generally, they will keep on to do a good work and may make well every effort to do more. Otherwise, if they do not get people feedback, they are not doing good job, company cannot expect them to be either satisfied or productive. From the view of the company, if staffs are inefficient, customers will not return to McDonald's for repeat purchase due to many complaints and uncompleted responsibilities will push up costs to a very high figure. So, need to inform them according to responsibility.